If you are an Australian resident and you have to lodge a tax return, you need to declare your worldwide income.
If you are a foreign resident of Australia, you only need to lodge a tax return if you have income that is taxable in Australia. This excludes any income from which non-resident withholding tax has been deducted. Examples of income that may be subject to non-resident withholding tax are bank interest and unfranked dividends.
Most working holidaymakers visiting Australia for only a short time are tourists or travellers, and are not Australian residents for tax purposes. If you have been paid salary or wages in Australia you must lodge a tax return.
The Australian tax year ends on 30 June. You should lodge your tax return by 31 October, unless you have been granted an extension to lodge at a later date. You will have to pay more tax if you didn't pay enough while you were working. If too much tax was withheld from your pay, you will get a refund.
It can take up to six weeks to process your tax return, so make sure you write an address on your tax return where we can send your notice of assessment.
If you are leaving Australia before the end of our tax year, refer to Leaving Australia - lodging your tax return to find out whether you can lodge your tax return before you leave.
Once you have determined your residency status, you will be able to give a correct answer to the question Are you an Australian resident? on page one of the Tax return for individuals.
Where your status has changed during the year of income from resident to foreign resident, you still need to answer 'yes' to this question as you would have been an Australian resident for part of the year. This ensures you are taxed at resident rates for the tax year. Your foreign residency for part of the year is taken into account by a reduction in your tax-free threshold. You are entitled to a pro-rata tax-free threshold for the number of months you are an Australian resident.
To claim a tax offset for a dependent spouse, you must have been an Australian resident for at least part of the year. Your claim will need to be reduced to take account of any period that your dependent spouse was not an Australian resident.
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The dependent spouse offset is not available for a spouse born on or after 1 July 1971.
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Foreign residents of Australia are not required to pay the Medicare levy, so you can claim the number of days that you are not an Australian resident during a tax year in your return as exempt days.
There is no need to disclose in your tax return any foreign source income you receive after you ceased to be an Australian resident. Also, all Australian-sourced interest, dividends and royalties derived after you ceased to be an Australian resident are subject to the withholding tax provisions as a final tax and should not be included in your tax return.
Foreign residents pay tax differently from residents. As a foreign resident you will:
- pay tax on all salary and wage income earned in Australia. The foreign resident tax rates are different from resident tax rates. See Individual income tax rates for details of foreign resident tax rates
- have 10% of any interest earned from your Australian bank accounts withheld for tax. This interest is not included as assessable income. You must advise the Australian financial institution of your overseas address so that this tax can be withheld, otherwise tax will be withheld at the higher rate of 45%
- not pay the Medicare levy. You also may not be entitled to claim Medicare benefits
- not be entitled to the tax-free threshold
- have tax withheld from unfranked dividends. These dividends are not included as assessable income. You must advise the Australian company of your overseas address so that this tax can be withheld, otherwise tax will be withheld at the higher rate of 45%. Where you receive franked dividends, no tax is withheld as the company has already paid tax on your behalf. These dividends and franking credits are also not included in assessable income
- not be entitled to claim certain tax offsets or tax credits which are available to residents
- be required to show any Australian rental income in your tax return.
The tax rates that apply to both resident and foreign residents are detailed in Individual income tax rates.
For more general information about residency, read Residency - what you need to know.
If you need help applying this information to your own situation, phone us on 13 28 61.
Last Modified: Friday, 14 December 2012